The real estate market in Maui has remained stable and is still white-hot, which sounds like a good thing – and can be – but as the month of April showed, there is a bit of a standstill between buyers and sellers as prices have continued to climb, yet buying power of consumers has remained relatively stable. Politics aside, the unemployment rate nationwide has remained strong at 3.8%, and while that is encouraging to buyers that they will be making a strong investment by buying in Maui and for sellers that they will be able to command a strong dollar, the unemployment has not led to buying power being increased, thus the sellers may have to dip in their pricing to have a successful disposition of their property.
Inventory is just starting to rebound. Five hundred fifty-eight (558) new listings have hit the market year to date from April, which reflects a 7.3% increase over this time last year according to the Realtors Association of Maui. The lack of inventory has sent a message to the market to increase supply, but while that is just starting to pick up steam, it has led to the high pricing we are seeing within the market. The lack of affordability has slowed down the sales, which is shown by the nearly 17% decrease in closed sales year to date in comparison to this time last year.
Housing Affordability Index
The housing affordability index, a metric provided by the National Association of Realtors that measures whether an average family in a certain region can qualify for a mortgage loan on the homes for sale within that region, is a great metric to keep a watch on. As prices have crept up, the housing affordability index has decreased from this point last year, signaling that the pricing has crept above the income level and that is another factor that is leading to the reduction of closed sales, yet the inventory has more to do with this than the pricing. Ultimately, the properties are selling.
Demand For Maui Real Estate
Despite pricing being an issue, demand within Maui remains strong. The days on market, according to the Realtors Association of Maui, has remained similar to last year, which points that while sales prices are fluctuating, ultimately property is still selling on schedule. Taking into account the housing affordability index, this creates a unique opportunity for would be sellers or buyers to make a deal happen. Sellers can take advantage of the disproportionate pricing by placing their home or condo on the market at a more reasonable price point which should lead to a timely sale. On the flip side, as a buyer, this is still a strong market to look into because while prices are starting to level out at a top end, as the area continues to grow, prices should steadily increase, but if a property can be obtained under the asking prices that are currently on the market, a buyer can be assured that they are getting a good deal because the ceiling is being pressed and peace of mind that it should not fall too far off from those numbers.
As with any property purchase, it is highly recommended that whether entering the market as a seller or a buyer that an individual contacts a qualified expert within the Maui real estate market. Put their expertise to work and use this data in a way that will ensure your success in this market through not only the pride of ownership but as a long-term investment as well.